The term credit card is used for different types of cards. With a “real” credit card, the cardholder is granted a credit limit. This can be a maximum available limit, such as 2,500 dollars . Alternatively, the monthly budget can be, for example, 1,000 dollars . The level of availability depends on the respective conditions of the card and the provider.
Depending on the provider, the amount used with the card can be paid once a month or paid in installments. How a credit card works therefore always depends on the card conditions. In addition, there are the so-called prepaid credit cards, which are managed on a credit basis.
How does a credit card work?
Because there are so many different types of cards and terms, it is important to ask yourself before you look for a credit card how it works and for what purpose you need the credit card. For example, if you only want a card that works on a credit basis, you do not need a credit card with a credit limit. If, on the other hand, you want to use the card to have money available when your account is empty, you should look for a credit card with an actual credit line. Which card is used at the end depends on what you intend to do with the credit card. The advantage of a prepaid credit card is that, depending on the provider, you can apply for and use these cards without credit record . This means that there is no framework available, but can still be used if you want to finance your trip.
Why do I need a credit card and what are the advantages?
The functions of a credit card are also shown in what the respective card is needed for. If you use it to pay for goods or games ordered on the Internet, a prepaid credit card is often sufficient. This can be charged up to the amount to be spent. So the cardholder also keeps an overview of his expenses. If, on the other hand, you want to spend more money or don’t want to constantly top up your card, you should opt for a credit card with a credit limit.
A credit card is always practical, which is also reflected in the various functions of such a card. You can pay faster at the supermarket checkout if you have a credit card. You don’t have to go through the hassle of searching for cash in your wallet to be able to pay. If you have a credit card that can make contactless payments, it’s even faster. Then the credit card no longer has to be inserted into the reader, but only held at the terminal in front of the reader. Payment simply doesn’t go faster.
Your advantages of a credit card:
- Withdraw cash abroad: Depending on the credit card, withdrawing cash in the respective local currency is often free of charge.
- More security through payments on the Internet: If your credit card is misused, these payments are insured.
- Credit cards often have bonus programs: by using your credit card frequently, you can secure attractive rewards!
When you are on vacation, you quickly realize how important a credit card can be. Depending on the country, long-distance travel can no longer make hotel and car rental bookings without presenting a credit card. This is the case, for example, in the USA. You won’t really get anywhere with cash. Even as a traveler, everyday life there can almost only be managed with a credit card.
How much does a credit card cost?
There are both paid and toll-free credit cards. Here it is important to define the requirements for the credit card. For what purpose should the credit card be purchased? As a rule, free credit cards are suitable for most consumers. You should consider key factors when choosing a credit card:
- Annual credit card fee
- Foreign assignment fees
- Cash withdrawal fees
- loan fees
In the case of credit cards without an annual fee, the interest on the loan is usually very high, so that a toll-free credit card is not always the cheapest credit card. It depends very much on what you want to do with the credit card. Compare the offers so that you don’t end up paying more than you want